Fact checking 7 Reverse Mortgage Myths

Fact checking The New Reverse Mortgage

Fact checking is the act of checking factual assertions in order to determine the veracity and correctness of the factual statements.

There’s an old party game where a story is whispered from guest to guest and then it comes full circle back to the originator. Then the original story is compared to the end story. It’s almost never the same. Imagine that scenario multiplied by millions and you have what people think they know about The New Reverse Mortgage compared to the truth.

If you’re a homeowner at least 62 years old you are eligible for a Reverse Mortgage. Whether you qualify for or should get one can only be determined by a reverse mortgage expert. So don’t let misinformation keep you from making an educated decision about your retirement.

Let the fact checking begin

Reverse Mortgages are a scam –

While a Reverse Mortgage may sound “too good to be true”, the fact is it is a very highly regulated loan program insured by the federal government, created by President Reagan in the 1980s. Reverse Mortgages have a number of safeguards to protect not only the homeowner(s) but also the heirs when the last homeowner passes away or leaves the home.

I can kiss my mortgage payment goodbye –

While not making a mortgage payment is an option, you are still required to keep your property taxes and homeowner’s insurance current (just as they would whether you have a mortgage or not). With a Reverse Mortgage you can pay as little or as much as you wish.

A Reverse Mortgage is a loan of last resort –

While many financial products have a single purpose, a Reverse Mortgage offers a number of options to help you plan for the next 20-30 years of your retirement. The best time to have money is when you really need it and a Reverse Mortgage gives you the options to plan ahead.

The bank will own my home –

Your homeownership rights are exactly the same as they would be with any other mortgage. As long as you comply with the terms of the mortgage (occupy as your primary residence, pay property taxes, homeowner’s insurance and maintain it) it’s still your home. Banks do not want to own your home!

I can’t get a Reverse Mortgage if I already have a mortgage –

You can get a Reverse Mortgage if you have enough equity to pay off that mortgage with the Reverse Mortgage proceeds. The #1 reason seniors get a Reverse Mortgage is to pay off an existing mortgage and get rid of that pesky mortgage payment (you’ll still be responsible for payment of property taxes and homeowner’s insurance)

My kids will be responsible for paying back the Reverse Mortgage –

Just like a traditional mortgage when the last surviving homeowner passes away the executor of the estate and the heirs will have to pay off the mortgage. If the home is worth less than the amount owed on the Reverse Mortgage the heirs will have the option of purchasing the home at 95% of the appraised value or give the bank a deed in lieu of foreclosure. Because a Reverse Mortgage is a non-recourse loan there is no residual liability to the heirs or the estate.

Reverse Mortgages are too expensive –

Yes, a Reverse Mortgage can be more expensive than a traditional forward mortgage. But a Reverse Mortgage is more than just a loan program it’s a retirement lifeline. It’s true value will be determined in 5, 10 or 20 years when you’re able to look back on a comfortable retirement and say “that was money well spent”

The New Reverse Mortgage isn’t for everyone…but it could be!

If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.